Tag Archives: Grocery

After nearly a year’s delay, Amazon Go is finally opening to the public on Monday morning.

Amazon‘s first automated grocery store promises “no lines, no checkouts, no registers” — and it could be a game-changer for the grocery and retail industry.

It’ll test whether the technology can deliver after reports that the automated check-out technology wasn’t working as planned early in 2017. It will raise questions of job creation and destruction by the e-commerce giant, and it’ll test whether consumers will warm to an omnichannel, technologically advanced retail experience.

The single 1,800 square foot located in the middle of Amazon’s Seattle campus was first unveiled in late 2016, and was supposed to open to the public in early 2017, according to the website.

Yet until now, it has remained in beta mode for Amazon employees only, reportedly due to the very thing that makes it so interesting: Technology that eliminates the cashier.

Amazon calls it “Just Walk Out” technology and it uses computer vision, deep learning algorithms and sensor fusion — many of the same advances being used to develop autonomous driving.

Jason Redmond | Reuters

Amazon employees are pictured outside the Amazon Go brick-and-mortar grocery store without lines or checkout counters, in Seattle Washington, U.S. December 5, 2016.

For customers, it’s simple: Scan your Amazon Go app as you walk into the store, pick up whatever you want, and simply walk out.

On the back-end, Amazon’s technology detects everything you’re taking or returning to shelves, and keeping track in a virtual shopping cart. When you walk out, Amazon charges your account and sends a receipt.

For now, Amazon is testing the concept on a limited basis and has no plans to implement the technology in Whole Foods. But an expansion of Amazon’s grocery technology could have enormous implications.

According to the Department of Labor, more than 3.5 million Americans held cashier jobs as of May 2016. Nearly 900,000 of those were in grocery stores. The Amazon Go store eliminates the need for cashiers, and could thus make thousands of jobs redundant. Amazon Go does hire people to work in the store — a team of “associates” who prep ingredients, make prepared items, greet customers and stock shelves.

Still, it could prove a tricky subject, given the current administration’s focus on creating jobs in America and President Donald Trump’s contentious relationship with Jeff Bezos.

In e-commerce, Amazon has already been investing heavily in automation, running the gamut from delivery drones to warehouse robots. At the same time, it’s been hiring thousands of new employees each year, growing headcount by 40 percent year over year.

With its purchase of Whole Foods last year for nearly $14 billion, it became the second biggest private employer in the country behind Walmart. However, an analysis published by Quartz last year looked at employment data for the retail industry as a whole and found that Amazon’s growth and hiring numbers don’t offset the overall retail job losses that it has helped cause.

With Amazon.com’s purchase of Whole Foods Market Inc., the online giant will control 1.2 percent of the grocery market in the Tampa Bay region.

That was Whole Foods’ market share in Hillsborough, Pinellas, Hernando and Pasco counties in 2016, according to Chain Store Guide. Whole Foods has three stores here, with two in Tampa and one in Clearwater.

Amazon is planning to buy the specialty grocer for $13.7 billion, but the implications of the deal go far beyond the more than 400 Whole Foods stores it will own. It will mean a new level of competition for Publix Super Markets Inc., which is based in Lakeland. Publix employs more than 36,000 people in the Bay area, including corporate workers at the Lakeland headquarters.

Publix, the hometown grocer, controls 39.3 percent of the grocery market with 117 stores here, according to Chain Store Guide. Use the interactive graphic below to see grocers’ market share versus number of stores.

Tampa Bay grocery market share

Winn-Dixie and Winn-Dixie Marketplace, which are owned by Jacksonville-based Southeastern Grocers, has nearly as many stores in that same area — 100, according to Chain Store Guide. But it controls only 16.1 percent of the market. Wal-Mart Stores Inc. controls 16.4 percent of the market with just 32 stores. (That figure doesn’t include Walmart Neighborhood Markets, which account for 3.2 percent of the market with 17 stores.)

The market share numbers will likely look different in the coming years. Amazon’s digital savvy has the potential to increase Whole Foods’ market share, and there are new competitors to consider. Sprouts Farmers Market Inc. is just entering the Florida market, with three stores open so far this year (in Carrollwood, South Tampa and Sarasota).

German discount grocer Aldi, which controls 1 percent of the market with 15 stores, recently announced it will ramp up its U.S. expansion plans. Lidl, another German discount grocer, appears to be laying the groundwork to enter Florida in the coming years.

Discount grocery retailer Aldi announced June 11 that it would invest $3.4 billion to expand its U.S. store base to 2,500 by the year 2022.

The German grocer currently operates 1,600 stores in the United States and said earlier this year it would expand to 2,000 by the end of 2018 at a cost of $1.6 billion.

The $5 billion move would have Aldi as the third-largest U.S. food retailer by store count behind Walmart and Kroger.

“It should absolutely be more than scary to traditional grocers and retailers,” Mikey Vu of the consulting firm Bain & Co., was quoted as saying in a June 12 article in The Wall Street Journal. Vu said Aldi has improved its stores and products in recent years, and is attracting a larger mix of shoppers.

A point of differentiation by Aldi and other discounters, such as Lidl, which is set to open its first U.S. locations this week, is their longstanding use of store brands to keep prices down, a common practice in Europe. U.S. consumers have traditionally been more brand loyal, but that is beginning to erode, especially with the millennial generation.

Millennials “are value-oriented and don’t hold the same stigmas about private-label items that older generations do,” Mike Paglia, director of the research firm Kantar Retail, was quoted as saying in the WSJ article.

“As we continue to expand and grow, our purchasing power continues to increase and allows us to bring products at better prices for consumers,” Scott Patton, Aldi’s head of corporate buying, said in an interview with CNBC.

Aldi said the new store openings would create 25,000 jobs over the next five years.

If grocery shopping just isn’t a pleasure for you, Publix Super Markets Inc. will now do it for you — in all 1,100-plus stores throughout the Southeast.The Lakeland-based grocer said Wednesday that it will offer same-day delivery via Instacart in all Publix markets by 2020.

Publix rolled out Instacart delivery service with a pilot program in the Miami area in July 2016 and quickly expanded to the Tampa Bay region. It is now offered in major markets throughout Publix’s footprint and will expand to dozens of others in the next five months. (See list below.)

The Instacart delivery service has created 2,800 jobs, according to Publix.

“We selected Instacart because we knew their approach and expertise would deliver a high-quality experience for our customers,” said Laurie Douglas, Publix senior vice president and chief information officer, in a statement. “The overwhelming response of our customers has proven that Instacart and Publix are a strong and dynamic team. We are excited to take the next steps in building our unique relationship to dramatically grow the service in our markets.”

Publix has defined its relationship with Instacart as a “collaboration” and on Wednesday said it was “strengthening its relationship” with the app-based delivery service. The grocer promotes the Instacart service with signage throughout its stores and has a section devoted to the service on its website.

Publix’s relationship with Instacart sets it apart from Shipt, a similar app-based delivery service that began offering Publix delivery in 2015. Shipt has green-and-white branding that is similar to Publix’s own logo, but there is no formal relationship between the two.

Publix’s decision to offer delivery services from all of its stores represents a major investment and a watershed moment within the grocery industry. Publix is known in grocery and real estate circles for the data it collects and analyzes. Instacart also has the ability to mine data from customers, and the fact that Publix is doubling down on delivery means the Lakeland grocer sees a profitable future in the service.
Wal-Mart Stores Inc. and Kroger Co., Publix’s two biggest competitors, have been rapidly expanding their click-and-collect services, in which customers order online and have items brought directly to their cars.

The Instacart delivery service goes a step beyond that with home delivery, and it also sets Publix up to compete with Amazon.com, which is laying the groundwork to be a major player in the grocery realm, as well as Jet.com, the e-commerce company Walmart acquired in September 2016. Jet.com has a grocery platform that the company has been rapidly expanding throughout the Mid-Atlantic.

Walmart is also piloting a program in New Jersey and Arkansas in which employees deliver items on their way home from work. Here are the stores where Publix currently offers delivery: